International airlines raise red flag over funds

Published: 27 September 2018

INTERNATIONAL airlines operating in Zimbabwe are reportedly contemplating cancelling their routes after failing to recover a cumulative more than $130 million repatriation funds they are owed by the country.

International agreements and treaty obligations compel airlines to repatriate revenues from ticket sales and other activities from countries of their operation to their home countries.

Zimbabwe is among a number of countries where such funds are locked and not accessible to the airlines.

Speaking at the Tourism Business Council of Zimbabwe (TBCZ) convention here yesterday, International Air Transport Association (IATA) head of account management for Southern and Eastern Africa, Mr Alexandru Stancu, said efforts to recover the funds have been unfruitful. He urged Government to unlock the funds to protect the local aviation and tourism sectors.

"We have this issue unfortunately in Zimbabwe where we have about $136 million of airline funds that we are not able to repatriate outside the country due to currency and forex restrictions that are currently in the country," said Mr Stancu.

He said engagements have been done with the Reserve Bank of Zimbabwe in the past where it was agreed that the funds would be paid in instalments.

"We agreed that a plan be made to unblock the funds bit by bit. Unfortunately until today no execution has been done and no action has been taken on this particular issue yet the funds keep accumulating. "Some of the airlines are reviewing their distribution strategies and withdrawing their operations from the country.

"This is going to have a massive impact on the country's aviation and tourism sectors. It will definitely have an adverse effect if this issue is not solved as the airlines from outside the country will have multiple difficulties and opt out," said Mr Stancu.

He said one of the airlines that have contemplated leaving Zimbabwe was Kenya Airways, which launched operations in Victoria Falls a year ago.

Mr Stancu said efforts were being made to address the issue as he also presented it in the presence of Acting President Kembo Mohadi who was guest of honour at the event. He challenged Government to urgently look into the issue.

"We are looking to have this thing solved so we can move forward as it is blocking all the other developments taking place especially on the infrastructure side.

"Zimbabwe should put more priority when it comes to airline funds and either unlock at once or commit to do so by year end," he said.

Mr Stancu said the funds started accumulating a few years ago. The convention was organised by TBCZ and was attended by various players in the tourism sector including heads of Government departments, hoteliers, and their counterparts from Zambia.

During the discussions, delegates highlighted the pivotal role that air transport plays to tourism and recovery of the economy, with aviation standing tall as a catalyst for economic growth. Mr Stancu said countries should modernise and think of engaging independent regulatory authorities to run airports to keep them competitive.